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Analyst: Boeing will offer “launch customer” tanker pricing

A change in Boeing leadership means the company offer lower prices in its next U.S. Air Force aerial refueling tanker bid than it did in the previous competition, analyst Scott Hamilton wrote Friday.

Scott Carson, who led Boeing Commercial Aircraft during the previous competition, has since been replaced by Jim Albaugh, the former head Boeing Integrated Defense Systems.

Carson “blocked what was described to us as ‘launch customer pricing’ for the KC-767” tanker in the previous competition, Hamilton wrote. “It must be remembered that the 767 production line was presumably fully amortized long ago and that there had to be a lot of room in cost and price. But Carson wouldn’t budge on price.”

Price is more important this time than it was in the previous round because the draft tanker request for proposals would award the contract to the lowest-priced adjusted bid that meets mandatory criteria, assuming the difference is more than one percent, rather than the best combination of price and capabilities.

One of Albaugh’s priorities these days is winning the tanker contract, Hamilton added. “We doubt that he will hesitate to price the KC-767 for a launch customer.”

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